Some budget revenues could fall below plan in 2017 so the targeted deficit could be reached if part of the reserves in the budget’s Country Protection Fund—the equivalent of 0.1% of GDP or about half of the 60 billion forint (EUR 192.5m) fund designed against unforeseen risks— remain unspent, the NBH concluded.

The NBH analyses the 2017 budget bill in the report it prepared to help the work of the Fiscal Council whose members include the NBH governor. Parliament is scheduled to take the final vote on the bill on June 13. According to preliminary data the ESA deficit was 2% in 2015 and a similar 2% is targeted by the government for 2016.

Gross government debt, calculated along the EU’s excessive deficit procedure (EDP) methodology and with an unchanged exchange rate, of 313.1 forints to the euro at the end of 2015, could drop from 75.3% at the end of 2015 to 74.5% by the end of this year and to drop another 0.8 percentage points to 73.7% at the end of 2017.

Republished with permission of Hungary Matters, MTI’s daily newsletter.